Hungary asks IMF to leave the country after early payback

Hungary has announced plans to repay its bailout loan from the International Monetary Fund early and asked the organization to leave the country.

The head of Hungary’s Central Bank Gyorgy Matolcsy wrote a letter
to IMF Managing Director Christine Lagarde on Monday asking for
it to close its representative office in Budapest as it was
"not necessary to maintain" it any longer.

The IMF says it is ready to agree since the current IMF
representative in Hungary is due to leave soon anyway.

Hungary is heading for a general election next year, and many see
the move as an attempt to show the government’s ability to avoid
austerity programs and to act without outside help.

In 2008, amid the global crisis Hungary was saved from bankruptcy
with a $26 billion rescue package from the IMF and the EU. Two
years later Prime Minister Viktor Orban's government decided not
to renew the deal to avoid closer IMF scrutiny of its economic
policies.

However, in 2011, Economy Minister Matolcsy turned to IMF for a
precautionary deal but didn’t get any reply.

In February 2013 Prime Minister Orban issued the country’s first
international bond since 2011, thus demonstrating the country
could go it alone by borrowing on global financial markets.

Relations between Orban’s government and the IMF have always been
strained. In 2010, when Orban came to power, his government
issued new laws, which were criticized as curtailing democracy,
the justice system and freedom of speech.

The European Parliament responded with a resolution calling on
Hungary to repeal the "anti-democratic changes."

Hungary still owes $2.125 billion to the IMF from its original
credit line of $25.5 billion.